Research On The Judicial Identification Of The False Statement’s Significance Of Securities

The determination of materiality has always been an unavoidable problem in Securities Misrepresentation liability disputes.With the increasing number of Securities Misrepresentation liability disputes,the problems existing in the judicial determination of materiality have become more and more prominent.Under the background of the amendment of the securities law and the promulgation of the provisions of the Supreme People’s court on hearing civil compensation cases of misrepresentation infringement in the securities market in2022,Conforming to the development of the securities market,aiming at the problems existing in the judicial practice of significance determination,this paper makes a new judicial practice exploration,studies and discusses how to establish the determination standard of significance in civil justice,and defines the review authority of the court for significance,so as to promote the development of justice.There is little discussion on the basic theory of the recognition of the materiality of false statements in China.In terms of theoretical research,we have learned from the recognition standards of materiality in some foreign countries.On the whole,the main standards are "investor decision-making standard" and "price sensitive standard",as well as other standards refined on this basis.The difference is that the connotation of these two standards is different in different countries,This is determined by the development degree and national conditions of the securities markets of various countries.Materiality first is the requirement for the content of information disclosure.According to the recognition standard of materiality,the information that has an important impact on investors’ decision-making can be screened out,which is of great significance to investment safety.It is generally believed that the recognition standard of materiality is developing and changing.With the continuous development and maturity of the market and the development of judicial practice,the recognition standard of materiality should have a certain development and progress.In judicial practice,courts usually determine the significance directly based on administrative punishment,but with the development of justice,some courts begin to adopt investor decision-making standards,price sensitive standards,or supplemented by investor decision-making standards based on administrative punishment.The judicial practice of determining the significance only based on the administrative punishment is outdated and does not meet the requirements of the judicial spirit.Whether the information is significant is only one of the factors affecting the administrative punishment made by the CSRC.However,if the information disclosure obligor has other violations,resulting in false statements,it may also be subject to administrative punishment,and the administrative punishment made by the CSRC is not necessarily significant,Therefore,when there is administrative punishment,it is inappropriate to recognize the significance of misrepresentation,and it is too harsh and unfair for the defendant.In addition,the courts in China have some problems in the trial practice of the determination of materiality,such as unclear ownership of the review power of the standard of materiality,different standards of judicial determination,too simplified analysis on the determination of materiality,and the standard of investor decision-making is a mere formality.In the context of the development of the new securities market and judicial practice,in view of the difficulties faced by the judicial determination of the significance of false statements in China,it is imperative to explore relevant solutions.Judicial practice must closely follow the development of China’s securities market.China needs to learn from foreign experience,and explore the recognition standards of the significance of Securities Misrepresentation with Chinese characteristics based on China’s reality.Clarify the court’s right to review the materiality standard,improve the investor decision-making standard,build a rational investor image suitable for China’s securities market,and strengthen the court’s comprehensive use of "investor decision-making standard" and "price sensitive standard" in the trial of false statement liability disputes,focusing on the former.At the same time,it also recognizes the value of price sensitive standard in the determination of materiality and carefully determines whether the materiality is established,Achieve judicial rigor and promote the development of judicial practice of false statement liability disputes in China.